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Agenda and minutes

Items
Note No. Item

17.

Apologies for Absence.

Minutes:

Apologies for absence were received from Councillors A R Lloyd and Mrs J A Ozog.

 

The Chairman welcomed Mrs Liz Jackson from Grant Thornton (External Auditors) and conveyed the Board’s congratulations on the forthcoming birth of her first child in late November. Liz advised that during her forthcoming maternity leave, a colleague from Grant Thornton would be fulfilling her role as external auditor and that she looked forward to meeting Members again in January 2019.

 

The presence of the Strategic Director (Internal Services), the Financial Services Manager and the Acting Internal Audit Manager were noted and welcomed by Members.

18.

Declarations of Interest.

To receive declarations of interest from Members including the terms(s) of any  Grant(s) of Dispensation.

Minutes:

There were no declarations of interest.

MD

19.

Confirmation of the Minutes of the meeting held on 28 June 2017. pdf icon PDF 140 KB

Minutes:

                        RESOLVED:

 

1.    That the Minutes of the Audit Board meeting held on 28 June 2017 be confirmed as accurate.

20.

References from Other Committees (IF ANY)

There are no references from other Committees at present for Members to consider.

Minutes:

There were no references from other Committees.

21.

Report from the External Auditor pdf icon PDF 51 KB

To consider the report from the Council’s External Auditor, Grant Thornton UK, LLP.

Additional documents:

Minutes:

The covering report from the Financial Services Manager (FSM) advised Audit Board Members that the External Auditor, Grant Thornton UK, had completed the audit of the Council’s 2016/17 Accounts as presented in their “Audit Findings” report (attached at Appendix A to his report).

 

Members were asked to welcome the External Auditor’s intention to issue an unqualified opinion on both the Financial Statements and the Value for Money (VfM) Conclusion as set out in Appendix A; and to approve the Letter of Representation for the year ended 31 March 2017 attached as Appendix B to the covering report.

 

Liz Jackson, Engagement Lead, Grant Thornton confirmed to Members that the External Auditors proposed to issue an unqualified opinion on the Council’s Statement of Accounts for the year ended 31 March 2017 together with an unqualified Value for Money (VfM) Conclusion. She made the following detailed comments:

 

·         The Council’s Financial Services Team had prepared a good set of draft accounts for the earlier deadline of 31 May 2017;

 

·         Supporting papers were to a good standard and provided in advance of the audit commencing, and the Finance team had responded promptly to queries, which had enabled the External Auditors to complete the audit within the agreed timeframe;

 

·         During the audit of the Council’s Property, Plant and Equipment (PPE) Register two (2) assets were identified as having been revalued by the Council’s Valuer but not recorded on the Register [Agenda p.33]. However, the value of this error was not material and did not impact on the reported financial position and was therefore recorded by the External Auditor as an ‘Unadjusted Misstatement’. Management had accepted a recommendation that two (2) additional controls be put in place for the future ;

 

·         Limited changes were made to the draft Statement as part of the audit process, but the changes were not sufficient to affect the draft Outturn position for revenue and capital budgets presented to Cabinet in July [Cabinet Min. Nos 38 and 39 refer];

 

·         The Letter of Representation [Appendix B to the covering report] complied with the Code of Practice on Local Authority Accounting and had provided the External Auditor with access to all relevant information and other sundry matters, and was commended to the Board for approval and signature by the Chairman and Section 151 Officer in their respective roles.

 

Liz Jackson confirmed that the current 2017/18 audit process had been re-set, to ensure that the Council met the new requirement for approved and published 2017/18 Accounts by 31 July 2018.

 

                        RESOLVED:

 

1.    That Members welcome the External Auditor’s intention to issue an unqualified opinion on both the Financial Statements and the Value for Money (VfM) Conclusion (attached as Appendix A to the report);

 

2.    That Members approve the ‘Letter of Representation’ attached as Appendix B to the report.

 

 

22.

Financial Statements (Statement of Accounts) 2016/17 pdf icon PDF 50 KB

This report present’s the Council’s Statement of Accounts for the period 1 April 2016 to 31 March 2017.

Additional documents:

Minutes:

The report from the Financial Services Manager (FSM) presented the Council’s Statement of Accounts for the period 1 April 2016 to 31 March 2017 as attached at Appendix A to the report.

 

Members were asked to adopt, approve the publication of, and authorise for issue the 2016/17 Statement of Accounts at Appendix A to the report. The Board’s formal approval would enable the External Auditor, Grant Thornton, to sign-off the Accounts and issue an unqualified opinion on both the Accounts and the Value for Money (VfM) Conclusion, as set out in the previous agenda item [Min. No. 21 refers]. 

 

The FSM reminded Members that the Council’s Statement of Accounts was prepared in accordance with ‘proper accounting practice’ - i.e. with regard to all the accounting rules issued by the Accounting Standards Board and the CIPFA Code of Practice on Local Authority Accounting. Those accounting rules differed from the statutory regulations that the Council was required to follow as a local authority and the Statement of Accounts demonstrated how the two regimes of ‘proper accounting practice’ and statutory regulations were reconciled.

 

He asked Members to note 2 (two) significant developments in the 2016/17 Statement of Accounts, which differed from those submitted previous years:

 

·         The Cost of Services as shown in the Comprehensive Income and Expenditure Statement (CIES) [Appendix A to the report] had changed, following a review by CIPFA of the Service Reporting Code of Practice. The previous requirement had been to break down costs into service areas e.g. Planning, Culture etc. CIPFA had decided, on review, that accounts would be easier to understand if the CIES was displayed in the same way that the Council is organised i.e. Managing Director, Strategic Director (External Services), Strategic Director (Internal Services) and the Local Authority Housing (HRA) which is reported separately [Appendix A agenda p.88];

 

·         A further new requirement is to show the results of both the ‘proper accounting standards’ and the statutory requirements on a departmental basis. This is now provided in the Expenditure and Funding analysis [Appendix A, Note 1a – agenda p.84].

 

The FSM also highlighted the fact that the timetable for publishing the 2017/18 Accounts will move forward to 31 May 2018 which will require those Accounts to be audited and approved for publication by the end of July 2018. As a consequence the Audit Board would have to meet at the end of July in 2018 rather than September going forward. He asked Members to note that in anticipation of the 2018 requirements; the 2016/17 Accounts had been completed and signed-off by 31 May 2017 and he wished to express his thanks to all members of the Financial Services team for this achievement.

 

The FSM then went through in detail, the following specific aspects of the 2016/17 Accounts with Members as set out in Appendix A to the report;

·         The Expenditure and Funding Analysis (EFA) - Note 1a [agenda p.84/85] showed on (the most important) statutory basis, that the net cost of Services was £8.543m with a surplus  ...  view the full minutes text for item 22.

23.

Progress Report on Internal Audit Annual Plan 2017/18 pdf icon PDF 50 KB

This report provides Member of the Board with information regarding the progress of the Internal Audit Team in delivering the Annual Internal Audit Plan 2017/18.

 

Additional documents:

Minutes:

This report and Appendices from the Acting Audit Manager (AAM) provided Members with information regarding the progress made by the Internal Audit Team in delivering the Annual Internal Audit Plan 2017/18. Since publication of the report [Agenda pages 187-192] three (3) further audit reports had reached the ‘Feedback’ stage and another two (2) had reached the ‘Fieldwork’ stage.

 

The Principal Auditor confirmed that she continued to act as the Internal Audit Manager in addition to fulfilling her own duties, that one auditor role remained vacant and that this role was currently filled by member of agency staff on a temporary contract until 31 December 2017. The new Internal Audit software was bedding in well and the Acting Audit Manager remained confident that the Audit Plan for 2017/18 would be met.

 

In response to a specific question from the Chairman, the AAM confirmed that all recommendations identified in an audit report which had received a ‘Limited Assurance’ Opinion were addressed. As shown in Appendix C of agenda item 10, follow-up of Limited Assurance recommendations was between 3-6 months for those deemed High or Medium priority or in the case of low priority recommendations, as part of the next planned review of the system.

 

 

                        RESOLVED;

 

1.    That Members note the contents of the report and the progress made against the delivery of the Internal Audit Plan 2017/18.

24.

Review of Internal Audit Recommendations - Progress Report pdf icon PDF 49 KB

This report is to update Members on progress of the implementation of recommendations agreed with Management during 2017 and to report on outstanding recommendations due for implementation by 31 July 2017.

Additional documents:

Minutes:

This standard report and appendices updated Members on the progress made on implementing recommendations agreed with Management during 2017, and reported on outstanding recommendations due to have been implemented by 31 July 2017.

 

The Acting Audit Manager (AAM) advised Members that 4 (four) of the audits listed at Appendix A to the report remained outstanding with the detailed reasoning provided in Appendix B. The Internal Audit team would continue to liaise with the relevant management to complete the outstanding work and update the Board at the next meeting in January 2018.

 

In response to a specific question from the Chairman, the Strategic Director (Internal Services) confirmed for Members that all new staff including appointments from Agencies were subject to a basic security check prior to being appointed. She also advised that Internal Audit were planning a review in this area in the near future and that the IA team continued to review the Council’s Recruitment and Selection Toolkit Part 5 to ensure it was updated on an annual basis and remained ‘fit for purpose’ (Appendix B to the report Agenda p.199).

 

 

                        RESOLVED:

 

1.    That Members note the reasons for delayed implementation of the audit recommendations as set out in Appendix B to the report;

 

2.    That Members endorse the revised dates for implementation of outstanding audit recommendations provided by Management as noted in Appendix B to the report.

25.

Audit Reports Issued Since Last Meeting of the Board pdf icon PDF 54 KB

This report is to inform Audit Board Members of the outcomes of the audits completed since the previous report to the Board on 28 June 2017 and to provide Members with the opportunity to request clarification or further information, if considered necessary.

Additional documents:

Minutes:

This report informed Members of the outcomes of audits completed since the previous report to the Board on 28 June 2017 and provided Members with the opportunity to request clarification or further information as required.

 

The Acting Audit Manager (AAM) confirmed, in response to a specific question, that a ‘Clear Desk Policy’ had been agreed with staff in the Council’s joint Revenue & Benefits Section - 30 June 2017 audit report [Appendix B para 6 – Agenda p.205].

 

Members also discussed, in general terms, the different categories of Opinion given to audit reports [Appendix C to the report - Agenda p. 207]. The AAM assured Members (in response to a specific question) that when an audit report attained an Opinion of ‘Substantial Assurance’ any priority and/or medium recommendations attached to the Opinion, were followed-up within the 3-6 month timescale.

 

                        RESOLVED:

 

1.    That Members note the contents of the report as set out in the attached Appendices A and B.

26.

Selective Invoice Checks pdf icon PDF 60 KB

During the June 2017 meeting of the Board, Members selected five creditor payments for checking. This report summarises the findings of that exercise and provides the opportunity for Members to select further payments for audit checking.

Minutes:

At the last meeting of the Audit Board on 28 June 2017 Members selected five (5) creditor payments for checking. The report advised Members of the outcome of that exercise.

 

The results of the review by Internal Audit confirmed that all spend decisions taken were appropriate and in compliance with Council procedures, as summarised in the report.

 

Members were invited to select 5 (five) further creditor payments for examination by the Internal Audit team and subsequent reporting to the Board in January 2018.

 

                        RESOLVED:

 

1.    That Members note the contents of the report.

 

2.    That 5 (five) further creditor payments be selected by Members for checking by Internal Audit with the outcome of that exercise reported back to the Board at its next meeting in January 2018.